Reforms that boost growth by enhancing economic flexibility often meet strong opposition related to concerns that they may imply adverse consequences for categories of workers. This study investigates how making product or labour market regulation more flexible changes workers’ risks of moving out of employment and jobless people’s chances of becoming employed.

Can both less income inequality and more growth be achieved? A recent OECD study sheds new light on the link between policies that boost growth and the distribution of income. It suggests that there are win-win policy options: raising human capital is key, various labour market reforms can help and taxation can be made more equitable and growth friendly. But there are also reforms that lead to a trade-off between growth and equity.